What is the benefit of paying discount points as part of the closing costs?
A. Discount points give the buyer a discount on the mortgage.
B. Typically points lower the interest rate on the mortgage. The more points that a buyer pays up front, the lower the interest rate.
C. Points lower the overall cost of the home. The more points that a buyer pays up front, the lower the total cost at closing.
D. Discount points give you a discount from the title company where you go to sign the loan papers.
Answer (1)
Paying discount points can lower the interest rate on a mortgage, resulting in reduced monthly payments and long-term savings. The upfront cost of these points can pay off, especially for buyers who intend to hold their mortgage for a longer period. Therefore, understanding how discount points work can help buyers make informed financial decisions. ;
